This is the second installment of a seven-part series by Michael P. Sampson.
Partners may acquire a home together, and they may contribute different amounts toward the purchase price. During their relationship, they may contribute different amounts toward improvements, the mortgage, insurance, and property taxes. Recognizing these respective contributions, agreements between couples may establish a fair formula for splitting net proceeds if the home is later sold or, if one person dies before the other and they are still together, a buyout of the decedent’s interest from the decedent’s estate.
Questions to think about include:
(a) If the partners have children, are still together, and one dies before the other, what would they like to see happen with the home?
(b) Is the answer different if the parties have been together for 2 years or 15 years? Would the parties like the surviving parent and children to stay in the home until there are no longer any dependent children?
(c) If the partners have children and one gives notice of an intent to end the relationship, what would the partners like to see happen with the home? Is the answer different if they have been together for 2 years or 15 years?
(d) If the partners have no children together, how would they like the home handled if one predeceases the other or if one gives notice of intent to end the relationship?
Parties may provide for a joint household account or other joint accounts to pay joint expenses. The agreement may allow either party to deposit into one or more joint accounts funds either party may earn, or distributions either party may receive from trusts, or money either party may have in a separate account. Joint funds may be deemed joint property, but ownership in trusts or each party’s separate accounts, and any growth in the value of such ownership or interests during the parties’ relationship, ordinarily would remain each party’s separate property, free from any claim by the other.
Our next segment will discuss separate property and jointly acquired property.